Answer to Question #66850 in Macroeconomics for jane

2017-03-26T19:51:32-0400

Question #66850

Consider an economy described by the aggregate production functionY = F(K,L) = K^0.3L^0.7(a) Does this production function have constant returns to scale (CRS)? Why?(b) What is the marginal product of capital (MPK)?(c) What is the marginal product of labor (MPL)?(d) Use your answers in (b) and (c) above to show that this production function displaysdiminishing marginal product (DMP).(e) Are K and L "complements"? Explain in some detail.(f) What is the capital share?(g) When capital per worker rises, what happen to labor share of national income?